I am the Founder of Community of Liberty, a chapter based organization committed to pursuing the art of living in liberty, a member of the Publication Committee of the Claremont Review of Books, an Advisor to TheGold StandardNow.org, and a juror for the Bastiat Prize for Journalism. I have just published with my co-author Ralph Benko the booklet, "The 21st Century Gold Standard: For Prosperity, Security and Liberty," now available as a free download at AGoldenAge.com. I bring to my columns an extensive background in the investment management business, including my experience as an equity portfolio manager, strategist, president of my former firm’s retail sales and marketing subsidiary and member of the parent firm’s management committee. As such, I have been a student and observer of the political/economy and its affects on markets, businesses, and my own business for more than 30 years.

Why I Support Herman Cain For President

I have decided to support Herman Cain for president of the United States, and have joined his team of economic advisors.

Central to my support are Cain’s pro-growth economic policies. They are responsive to the challenges facing America after more than 10 years of stagnation, an unemployment rate stuck near 9% for 2.5 years, trillion-dollar deficits and the ongoing risk of financial crisis. Just as important, they reveal a governing philosophy that trusts in the liberty of the American people rather than government to create the jobs and businesses necessary to compete in today’s global economy.

Cain’s “9-9-9″ tax plan is based on sound economic principles. Broaden the tax base, drop the tax rates, simplify the tax code and collect the same amount of revenues. Get rid of today’s complex and corrupt personal income and corporate income tax codes. Eliminate federal payroll taxes, the capital gains tax and the death tax. Generate the same amount of revenue with a flat personal income tax of 9%, a corporate flat tax of 9% and a consumption tax of 9%.

The lower tax rates would reduce the tax barriers to U.S. economic growth and job creation, leading to a bounty of both. Tax simplification also would eliminate the dead weight loss of tens of billions of dollars spent to comply with or avoid today’s tax system. By putting Americans back to work, instead of pitting them one against the other, the 9-9-9 tax plan would generate additional revenues governments at all levels need to meet their obligations.

Those who criticize Cain’s tax plan based on an analysis of who pays what taxes are forgetting two vital aspects of tax policy. First, the cost of the current tax system is imbedded in prices of many of the goods that all of us — rich and poor — purchase. The generally higher prices for food and shelter and almost everything else in New York City, for example, reflect in part the generally higher tax burden on those who live and work in the city. Second, the heaviest burden of today’s tax system is born by those who are unemployed because of the distortions and perverse incentives it imposes on the U.S. economy.

Beyond the technical pro-growth aspects, the 9-9-9 plan would shake up the politics-as-usual status quo. The power of lobbyist would be reduced — because there will be so much less to lobby for. The deductions that allow big corporations and the truly wealthy to game the system are removed.

Cain would reduce the burden of government further by actually reducing the level of government spending, not just some future growth in spending 10 years from now. He would start with a 10% across the board reduction in the spending by all agencies. For an operation as bloated as the federal government such cuts should actually lead to improved performance by, among other things, eliminating those functions that may at one time have made sense, but that are now expensive distractions, expensive not only in terms of money, but also in vital management time.

Regulatory policies would also come under sharp review. Federal regulations now cost the U.S. economy an estimated $1.7 trillion, or an astounding 12% of the entire income of the American people and businesses. Up for repeal will be ObamaCare, Dodd-Frank “financial reform” and Section 404 of Sarbanes Oxley. The EPA’s job-killing, anti-energy production agenda will be rolled back. Expect patient centered health care reform and an all out effort to develop the America’s vast natural gas and oil reserves now accessible because of breakthroughs in drilling and extraction technologies. This approach will by itself, create tens of thousands of high paying jobs. More important, it will end the “energy crisis” and get the government out of the business of manipulating the kind of cars we buy and telling us what kind of light bulbs to use in our homes.

Finally, Cain distinguishes himself by his understanding that a pro-prosperity monetary policy is one that first and foremost stabilizes the value of the dollar. “A dollar must always be a dollar, just as an hour is always 60 minutes,” he explains. Imagine the benefits to American businesses and families of knowing with a very high level of certainty that the buying power of the dollar five, 10 or 20 years from now would be approximately the same as it is today. Businesses could plan without worries about inflation or deflation, or big swings in the price of oil and other commodities. Interest rates would be predictably low and stable. Money now hiding in inflation hedges would once again be available to invest in productive, job creating companies.

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This sounds more like wishful thinking rather than real reasons to vote for Cain. 9-9-9 would open a new stream of revenue to the Feds through a national sales tax. I would have to pay 18% sales tax in AZ with that program! The 9% income tax could eliminate many deductions, thereby increasing the effective tax rate. The only winners in Cain’s plan are the plutocrats who would see their tax rates plummet. Who would pick up the slack? The same folks who always do… the middle class. This is no solution; it is only an acceleration of the destruction of the goose that laid the golden egg, i.e. the middle class. You must remember… no middle class… no customers… no profits.

What else should we expect from a former Fed. He is just another plutocrat trying to secure their own perceived best interests – even if they do not realize it will lead to their destruction long term.

You miss the essential point that 9-9-9 will replace existing payroll and income taxes. And, to a large extent, the cost of these taxes are imbedded in the prices you pay.

Second, although most economists will not tell you this, it is widely accepted that the incidence of a tax — that is who pays the tax — has little to do with the burden of the tax — that is who suffers the consequences of a tax. A tax can be shifted forward to customers or suppliers or employees. For example, in 1993, when the top tax rate was increased by 20% to 39%, my dentist increased his fees 20%! He “paid” the tax, but I got the bill.

Finally, the greatest burden of the combination of the current tax system, anti-growth regulations, and unstable monetary system is born by the unemployed.

New revenue stream but old ones removed. Don’t forget that we are at the mercy of Congress no matter what tax system is used. The current tax on everybody could be increased to 99% should they so decide. Not ecstatic about 999 but it does make for transparency whereas the current system has so many favors for the favored that only a tax attorney knows for sure – probably.

His 999 plan does a few things that I object to. The first is to increase the taxes on the poor who already need assistance just to survive. The next is that it encourages the investment in the stock market through it no capitol gains tax. It does nothing to get money directly to needy companies that want to expand there by increasing jobs and it make underemployment not even worth the cost of trying. We hit a point where I will have more if I don’t work than I will if I do. It also eliminates the taxes for social security and unemployment which would be the first step in fazing them out. I feel we need this type of security more than we need the additional money to invest in the stock market. The stock market may yield more returns than a trip to Harrahs but it is still gambling and not a direct investment in corportations as new stock is rarely issued by a company.

I agree that the 999 plan needs some adjustment. I’d like to see food and medical exempt from sales tax – those two items account for a high percentage of the spending for low income workers. I do believe that Herman Cain is smart enough and flexible enough that the current plan could be altered just a little bit so that the low income segment get hit less. Also, and this is somewhat scary, nothing gets done without Congress blessing and hopefully that will come after much debate and more hopefully, good tweaks are made.

kldud: You need to read the article again. The “poor” no longer pay payroll tax–both their share and the “employer’s” share. The latter being one of those costs embedded in prices. Product and service prices go down–probably more than the 9 percent sales tax.

The problem will be the army of unemployed tax accountants, lawyers, IRS employees, tax shelter snake oil salesmen, etc. that will have to find honest work.

Most of the pundits diminish Herman Cain. Look what pundit adoration has brought us to date – a frighteningly more polarized nation with a crashing economy that they feel only more government we can’t afford, will buy. I feel that I could follow Herman Cain whereas the rest, I only barely tolerate.

Having visible supporters like Mr. Kadlec is going to make a big difference. Right now, Cain is facing criticism/questioning from the entire MSM, plus plenty of Republican candidates. Unlike his competitors, he’s been pushing back on his own. With a need to give the average voter a better idea of how 9-9-9 would affect their pocketbook, he needs all the help he can get. http://bit.ly/nvQ72y

I think your endorsement is a big boost to Mr. Cain. I generally like Mr. Cain’s experience, debate style, and his policies.

I do have one question and major reservation though. How do you reconcile his comment at last week’s debate that ,”Alan Greenspan was an Excellent Federal Reserve Chairman”? Many of your writings describe about how The Federal Reserve helped fuel the original bubble that caused the dot-com and housing corrections. And I would argue that the Fed’s current dual mandate and that of a “strong dollar” you and Cain support are a contradiction. If we should have liberty then why should a central board set interest rates or money supply quantity?

Best of luck to you and Mr. Cain. May freedom and liberty win the day.

To think that people are actually taking a plan based on selling PIZZA seriously! I think the energy behind Cain is a reflection of how misinformed and lazy the Americal public really is. Cain is the flavor of the week and will be out of the conversation in less than two months. Things don’t “CHANGE” in Washington, Obama has been forced to give up the ideals that got him elected because of DC politics. Trying to be a revolutionary will not work for Cain either, if he is elected Washington will eat this plan alive and we will all end up with another federal tax that looks nothing like it was intended!

With the especial sincerity that only an atheist like myself can summon in using the phrase, God bless Herman Cain, Mr. Kadlec, and God bless you for supporting him!

I have watched in anguish as we have nominated RINO after RINO for the last two decades, only to watch the government metastasize faster under the Republicans than Bill Clinton.

Now the Democrats, the media, and even the Republican are all in a panic. Fox news has even smeared Cain for the shocking fact that those in states with 9% sales tax rates will see 18% at the cash register. As if we won’t all be paying the same federal rate and the same state rates we have now.

With all the panicked liberal establishment rush to coronate Romney you’d think we conservatives were going to do something crazy. Like re-elect Ronald Reagan. Well I say in Cain we can do even better.

Yes, here in CA I will be paying 9 + 7 = 16 percent sales tax. But i will be paying far less income tax. And, as the author says, prices of everything I buy will be less, partly because businesses that produce things pay less taxes. Taxation is really a zero sum process. What Cain advocates is a much broader and simpler program that requires all Americans have skin in the game.

Forced skin in the game should reduce class warfare that Obama has ignited.

Furthermore, given that American businesses that compete globally will not be so disadvantaged. That should equate to more jobs here and more growth. Increased economic activity that occurs in a free environment always produces more things and lower prices.

gliderpilot, the current tax system isn’t even zero-sum. The money that goes to the gov. is used far less efficiently than the private sector. So yeah, it’s zero sum on April 15, but needs discounting afterward. After many years of watching the unending an clueless fighting over tax monies, my conclusion has been that the only way to save the taxpayer is to starve the beast, and whatever tax system makes it easier is the one to support.